Stephen; This is typical of what I see when I say the specialist are
taking up short positions, while the tick can be negative, the
index goes up as the volume is to the upside, they control the
amount of ticks from day to day you can see X volume on say MSFT
and on my server see how many ticks she made, some days say with
the same volume the ticks are less, ( they match more orders for
each trade or tick ) this is causes me to worry if volume is not
UP, any way if the volume on the upside is opposed to the ticks,
( and they can only short on the up tick ) then what is being
bought is being bought from the specalist who is selling it short
on the up side, as he don't see many buyers, but what he does see
he lumps together shorts to them, the sellers get put on hold,
and wind up selling after he lets a down tick work, here they
sell to him, while some will argue that this just happens on
the nasdaq , they are playing with words. Specialist do hold
short positions at times to make a market.
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I can't confirm if this is what your seeing "today" as I have not
looked for myself as of yet today. But what you describe is much
what tips me off to the Specialist holding up the
ask so as to increase their short positions, ( you can bet when they
short they do so at the top of the short term move, and note they
mayu not hold this position very long sometimes only 30 minutes
or so, other times a day , they are not greedy about staying
short and will buy them back for as little as a 1/16th at times
if they see buyers come in, which you will know by total
volume getting strong as the prices move up. In other words if
see all these things, the down tick is prominent ( but volume to the up side ) index up yet weak over all volume, the prices are being
supported and the upticks are short sells by the experts.
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It's not just a buyer seller game, it's a short sell, to a buyer,
cover buy from a seller, & down ticks with up volume is a result of
how they match orders to their advantage, they are not there just
for your benefit. Each stock on the NYSE has it's specialist who
has to make money somehow.
Like I say I haven't looked today so far, and I do this by feel
more than any set rule, it takes getting a feel for it as it
all happens to fast and I don't have computer program that
takes the data and spits out the flags. ( but you can bet some
big traders do )..
Also when you see this keep one eye on the futures, they are also
watching and waiting on them to dip enough below fair value for
sell programs to come in, then they can cover their short term
short, which most of them did on the close yesterday.
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It's sort of tricky, and mostly only good for a brief look forward,
but if it happens often enough you can say it's the result
of down trend, I called the top this way Nov 23rd..that was a little
early, but it was in front of the curve. It's also what I saw
July 17th, and I managed to see the reverse Sept 1st..not exactly
where the market changed course, but it was closer than any of
the gurus I keep an eye on.
Just keep watching it for a while, you'l get a feel for it.
It seems the ticks just record the last trade up or down
they don't record the size, and so you have to sort of patch that
in mentally, and that's were total volume comes in.
Try to put yourself in the shoes of the specialist who can see
the order flow coming in and has to decide if he should short
or cover and how to do it, as to what size packet to match on the
up tick, vs the down tick.
Here is a place that gives free delayed quotes, and shows the
volume vs number of ticks on a stock, and that can tip you off
if from day to day you know the norm for that stock, (volume per
hour ) & normal tick size you can almost see when the
specalist short after you get into it. They are the ones in the
know, and the shirt tail you want to hang onto, but don't think
you can beat them, you wont get to short at the price they
do..<G> but if your short term trading it can often
tell you when to get out.
I would suggest trying to get use to the SPY, volume, tick size,
and spread..it tracks the S&P by arbitrage trading; the ones
who make market in it are smart, you can't beat them but you
can catch onto their pattern, onec that's done you will be
ahead of the herd.
waterhouse.com
Go to free quotes and type in SPY or DIA, get a feel for both of
them and keep it simple as even that is a lot to get use to
( avg volume (+ or- ), vs tick size, = price move with what ? spread ) ...they do tell you what they are doing, after you get their
pattern, they see first what we don't till later..order flow,
they match the orders and have leeway in the size of the
packets they match together.
Jim
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